About National Instruments Corporation
National Instruments (NI) makes a measurable difference, virtually, in the lab. The company’s products help create virtual instruments that can observe, measure, and control electrical signals and physical attributes such as voltage and pressure. The company's flagship LabView product allows users to create graphical interfaces for controlling instruments and capturing and analyzing data, as well as set up automated functions. In addition, NI provides programming tools, software applications, and hardware products. Its hardware and software products can be used in a modular fashion, depending on a customer’s needs. The Americas accounts for around 40% of sales. The company was founded in 1976.
National Instruments’ products generate about 90% of revenue with software maintenance accounting for the other 10%.
The company offers application software products that include NI TestStand, NI VeriStand, NI DIAdem, NI InsightCM Enterprise, and NI Multisim, which complement the LabVIEW and other NI products and some third-party software.
NI’s hardware and driver software products include Data Acquisition (DAQ) Hardware/Driver Software and a PXI Modular Instrumentation Platform. The DAQ products are instruments on a board that users can combine with sensors, signal conditioning hardware, and software to acquire analog data and convert it into a digital format that can be accepted by a computer. The PXI modular instrument platform is a souped-up PC with modules that address a variety of measurement and automation applications.
National Instruments operates two facilities to manufacture its hardware.
NI is headquartered in Austin, Texas, and it has offices in more than 50 countries, as well as manufacturing plants in Hungary and Malaysia.
The company's geographic sales are not dependent on any single region. The Americas account for about 40% of sales and the Europe, Middle East, India, and Africa (EMEIA) and the Asia/Pacific regions bring in about 30% each.
Sales and Marketing
NI relies on a direct sales force to sell hardware and software to its customer base of 35,000 companies. It also sells through distributors, original equipment manufacturers (OEMs), value-added resellers (VARs), system integrators, and consultants.
The company's main customer targets are the semiconductor, transportation, aerospace, and defense industries as well as government agencies. Other areas are academia, electronics, and manufacturing. Customers include Intel, Qorvo, Honeywell, and Mazda.
NI has posted three years of revenue growth and the rate of growth accelerated to about 5% a year in 2017 and 2018. The company notched record revenue and profits in 2018.
In 2018, sales rose to about $1.4 billion, up about $69 million from 2017, driven by higher product and software maintenance sales. The company reported increased sales volume, particularly for orders greater than $20,000, across its geographic regions. Demand increased for NI's products used for validation and production test of semiconductors for 5G wireless network applications. Products for automotive applications also posted higher sales.
NI's net income rose to $155 million in 2018, an increase of more than $100 million from 2017. The difference came from higher sales, a slower rate of increases in expenses, and a lower tax bill.
The company ended 2018 with about $259 million in cash sitting in its coffers compared to $290 million the year before. In 2018, operations generated $274 million, while investing activities used $210 million and financing activities used about $91 million.
NI continues to invest in its focus industries, semiconductor and automotive. The move to 5G networks has spawned a new class of semiconductors that NI's products are used to test. In transportation, the trend toward electric vehicles and advanced driver assistance systems (ADAS) has boosted NI's sales. The company intends to aggressively direct its cash to such strategic areas to accelerate its capabilities in those areas.
NI formed a partnership with Germany-based ETAS to drive automotive business. The companies formed a joint venture, ETAS NI Systems GmbH & Co., which is to be fully operational by Jan. 1, 2020. The venture is to help customers achieve shorter design cycles, reduce test times, and get to market faster. ETAS NI Systems will combine NI’s software-defined platform and input/output capabilities with ETAS’s expertise in developing and integrating hardware-in-the-loop tools.
NI has reoriented its most of its sales to focus on accounts and applications and away from a geographic focus. Some account-based sales teams work to build partnerships with customers with high potential while others work to generate demand from specific customer segments.
NI's business tends to rise and fall with general economic conditions. Slowing economic growth in Europe and China dented sales in parts of 2018. In China, the situation was exacerbated by trade tensions between the US and China.
In the 1970s James Truchard, working at the University of Texas Applied Research Laboratory, was frustrated by the lack of connectivity between the lab's computers and testing equipment. Truchard, who as a kid built homemade radios, founded National Instruments in 1976 with fellow lab employees Jeffrey Kodosky and William Nowlin. The trio raised $13,000, which included part of Truchard's teacher retirement fund savings, and set up camp in a room behind Truchard's garage.
Using Hewlett-Packard's technology for collecting test and measurement data from its own machines, the trio created the general-purpose interface bus (GPIB), a device that links computers to scientific instruments. The devices eliminated the practice of using paper, pencils, and rulers to track instruments. The colleagues' vigor kept the company small but busy. Truchard designed hardware and wrote press releases. Kodosky developed programs and handled customer support.
11500 N Mopac Expy
Austin, TX 78759-3563
Phone: 1 (512) 683-0100
Employer Type: Publicly Owned
Stock Symbol: NATI
Stock Exchange: , NASDAQ
President and CEO: Alexander Davern
CFO: Karen Rapp
Chairman: James J. Truchard
Employees (This Location): 674
Employees (All Locations): 7,300
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